Plan for These Hidden Homeownership Costs

The hidden costs of homebuying aren’t secrets, per se—they’re expenses that are hard to predict if you’re in the process of shopping for a home.

Spectora, a home inspection software service, dug into homeownership costs in the American Housing Survey, which the Department of Housing and Urban Development and the Census Bureau conduct every two years.

The company identified key hidden costs of homeownership in the metropolitan areas with the largest populations, based on the survey’s responses from more than 45,000 housing units in those areas. While the AHS surveys all types of housing units (apartments, houses, etc.), some of the expenses reported tend to be unique to homeowners.

Here are some of the monthly median costs you’ll want to have on your radar:

Utilities included water, gas, electricity, fuel oil, other fuel (solar, wind), and trash collection. It’s no surprise that it can get expensive to heat a home during a Boston or New York winter, but not all utility costs are obvious. Places like Miami, Dallas, and Phoenix saw higher trash collection costs.

Homeowner association fees

National median: $62 per month
Highest median: New York City, $358 per month
Lowest median: Detroit, $25 per month

If you’re considering buying a home in a building or neighborhood that has a homeowner association to maintain it, this is a good time to remind you that these median amounts are the midpoint for what people reported paying. These fees aren’t tax deductible, although some lawmakers have tried to change that.

Home insurance premiums

If you’re going to buy the home, you’ll need have cash set aside to buy the insurance. Sorry, Miami, it’s tough being in the hurricane zone.

Spectora threw in driving costs to determine a total median monthly cost for “hidden” homeownership items. I don’t agree with the inclusion of driving costs, because driving is far from unique to homeownership. If you’re buying a home in the metro area where you rent, your transportation methods and associated costs are likely to stay in a similar range.

You might say, “But I rent and I pay utilities! Homeownership be damned!” and I don’t doubt it, but there are so many variables for what utilities you might be on the hook for when you rent. Compare that to homeownership, when you are absolutely on the hook for all those utilities.

If the national median for additional homeownership costs is $875 per month based on this report, then you can use that as a target for your budget beyond your mortgage payment. If you plan to buy in one of the more expensive locations, plan accordingly.

This is not the be-all-end-all guide to hidden costs. The routine maintenance. Unexpected plumbing repairs. Maybe a yard. The fact that you suddenly have 17 windows that need something covering them.

But If you’re starting to buckle down your budget to anticipate your post-closing costs, these stats can help you anticipate what you might face in your part of the country.